Like it or not, everything costs a lot more than it did last year.
There’s a lot of reasons behind this – a growing economy that can’t keep up with the supply required, a smaller workforce that is simply not able to get the raw materials companies need to build or make “enough” of any given thing.
Cars cost more. Gas costs more. Food costs more.
Pretty much everything costs more.
So, are there any ways to beat inflation? Or, at least, to limit the reach of it until prices begin to normalize?
Yes and no.
Everything I’m seeing right now indicates that many of the price increases we’re seeing right now will be here for at least the next 6 months. So, while it’s unlikely you could buy 6-12 months of gasoline or diesel for your vehicle, you could, at least in theory, buy some things now in bulk to slow the creep of inflation in your wallet.
I know of at least two families who, of all things, bought half a cow from a local farmer.
They aren’t going to be impacted by the rising price of beef for at least a year.
Likewise, a client recently told me that instead of buying a new car, he found a “classic” – a 1987 “one family” Lincoln – for less than the down payment on the Lexus he was looking for. Everything worked, and, by his own calculations, even though the fuel economy isn’t quite what he wants, the lower insurance and maintenance costs will leave him well ahead if he only drives the car for 12-18 months.
More importantly, he’s confident that, when it comes time to sell his “grandpa car,” that he’ll be able to sell it for at least what he paid for it.
Now, I realize that not everyone can buy a cow or an old car, but there are a lot of ways you can use creativity to slow down how inflation impacts you.
Some “easy” examples:
- Ask about a discount for upfront or cash payments.
- Think about any big purchases and try to plan them well in advance.
- DON’T stop enjoying life, just understand and budget things better. You deserve your wedding to be a beautiful event, but with the rise in airfare costs (up 41% this year) and car rentals (up nearly 60% this year!), your destination wedding will either cost more, require you to wait, or necessitate some creative solutions.
There are two schools of thought when it comes to inflation – A.) “You only live once” and you just have to accept it or B.) You can simply outsmart it and live the life you want to.
Neither one is wrong, but the truth is, for at least the next year or so, the amount of value you get out of every dollar you spend is going to cost you more than it used to.
Spend wisely, my friend.
Jeff Roltgen, Tax Rescue CPA
Jeff@TaxRescueCPA.com
www.TaxRescueCPA.com
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